The stock price of UPL Limited tanked on Monday after the agrochemical firm unveiled its reorganization plan on Friday.
Second-Largest Listed Pure-play Crop Protection Platform
UPL wants to create an independent and focused crop protection platform by merging its Indian and international crop protection businesses.
The idea is to unify the India platform, UPL Sustainable Agri Solutions Limited (UPL SAS), in which the company holds a 90.91% stake, and the UPL Crop Protection Holdings Limited (UPL Corp) through which UPL holds a 77.78% stake in its international business.
The merger will form UPL Global Sustainable Agri Solutions Limited (UPL Global) that will be listed as a public company.
“The Board of Directors of UPL Limited at its meeting held today has approved a group reorganization plan through a composite scheme of arrangement (“Scheme”) with the objective of unlocking value for its shareholders by creation of an independent and focused crop protection platform,” the company said in a statement.
The scheme will create two listed entities: UPL as a diversified agricultural and specialty chemicals platform and UPL Global as a dedicated crop protection platform. The objective is to give investors flexibility in selecting investments that best suit their strategies and risk profile.
UPL’s Global Crop Protection business CEO Mike Frank, who will serve as the CEO of the new entity, said that housing the company’s crop protection businesses in one platform will create the world’s second largest listed pure-play crop protection platform.
“With a presence in more than 140 countries, this unified platform will enable us to deliver innovations to farmers faster, more efficiently to gain greater market share. This will position us to strengthen operational synergies and drive long-term value for our stakeholders,” Frank said.
UPL Stock Price Down
Following the announcement, the brokerage firm Nuvama Institutional Equities downgraded UPL Limited from “Buy” to “Hold”.
The stock is currently trading for ₹648.85, down by 13.76% from the previous close of ₹752.35.
